Domestic capacity in Brazil declines for the first time since 2003

Madrid
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Capacity in the maturing Brazilian domestic market fell by about 2% in September for the first time in nine years, despite a nearly 8% increase in traffic during the month.

According to data provided by Brazil's aviation authority ANAC, the situation helped grow the domestic load factor by 6.8 percetnage points compared to September 2011 to 75.5%. This is in line with requests from senior officials at TAM and GOL who declared that capacity needed to be controlled in order to demand an at least 10% fare increase to push their operations back into the black after reporting huge losses earlier this year.

TAM consolidated its market share at over 40% in September, compared to 38.3% a year earlier, while GOL fell to 33.6% from 38.9% during the same period in 2011.

GOL's market share is expected to recover to about 39% once it integrates Webjet's figures with its own. The airline acquired the low-cost carrier last year and has obtained all of the necessary regulatory approval.

Brazil's third largest airline Azul, combined with merger partner Trip, have a 14.1% share of the domestic market.

Avianca Brasil was the fourth largest carrier for the first time with a 5.5% market share in September.

Internationally, TAM continues to lead among Brazilian carriers with a nearly 90% market share of all international passengers flying on the country's airlines.